Kelly Teal, Contributing Editor

February 29, 2008

5 Min Read
New CPNI Rules Vex Agents

March 1 marks the deadline for carriers to comply with the FCCs heightened customer proprietary network information (CPNI) rules. Getting the right processes and paperwork in place in time has been quite a ride for carriers and agents alike bumpy for some, pretty smooth for others and, in some cases, a non-issue.

The new rules require providers to authenticate a caller before releasing information; to immediately notify subscribers of certain account changes; to have new customers create passwords when they sign up for services; and to contact law enforcement officials if a customers CPNI is given to a third party.

Compliance with the CPNI requirements is coming along but not without frustration and effort, sources say. Agents who thought they had the right paperwork in place sometimes find thats not the case and have a tough time completing customer orders as promised. Carriers, on the other hand, could face minimum fines of $100,000 for non-compliance.

Its no surprise that the new rules are making life a little more difficult for partners trying to meet their business customers expectations. Indeed, most businesses use an agent or VAR to avoid handling the mundane duties of adding, dropping or changing services. Often, those clients sign a letter of agency (LOA) giving permission for agents to oversee changes, but as it turns out, there are different “strengths” of LOAs. Some arent solid enough for the new CPNI regulations, which require new paperwork and more time. Worse, some carrier customer service reps (CSRs) havent heard of LOAs, and some carriers are harder to deal with in this respect than others.

“Even when you call customer service on their direct 8XX numbers, that rep has to get a verbal permission from the customer at that moment to view the records,” explains one agent, who also requested anonymity. “It makes sense that they should do this, but you run into CSRs at the carriers who dont even know what an LOA is. When that happens, that call is going nowhere and you normally hang up, call back in and pray you get someone else that knows what the heck is going on.”

The same agent admits to misrepresenting himself as the client so he could fulfill a customer order as promised. “We got busted once last year, but it ended up being okay,” he says.

Carriers including interconnected VoIP providers also have been scrambling to ensure compliance since Dec. 8, 2007, the day the tightened requirements took effect. Some, however, saw the changes coming and started planning far in advance. Los Angeles-based TelePacific Communications, says it was prepared months ago for the CPNI changes and, to be sure, none of the agents who complained of problems with carriers named TelePacific. “Our regulatory team flagged us months ago” about the additional CPNI requirements, says Ken Bisnoff, senior vice president of strategic opportunities for TelePacific. “We decided to aggressively go after it because we didnt want to be on the wrong side of compliance issues and having things affecting customers.”

TelePacific acted weeks before the government cemented the CPNI changes by requiring agents, their end users and other third parties to complete authorization forms. The paperwork concerned various levels of consent to the release of private information. Agents also had to agree to pay TelePacific back if the CLEC gets fined for agents failures to keep customers CPNI confidential.

Other carriers apparently have had more stumbles.

One agent recently was told by a carrier that he couldnt manage a customers telco services even with an LOA. The impasse was resolved when the carrier, Cavalier Telephone, issued a form that, once signed by end users, gives agents the power to make account and service changes for their clients. Thats a good outcome, but, “We have over 300 customers that is a lot of work on our part,” the agent says. “I cant imagine what an administrative impact that will be for larger master agents.”

Cavalier says it now has given all of its agents a CPNI LOA that allows agents to receive protected information on the customers behalf. “Another enhancement we made is for new customers,” says Glenne Moore in Cavaliers business marketing department. “When they sign up for Cavalier, they can authorize the agent to receive CPNI information.”

For master agency Telecom Brokerage Inc. (TBI) in Chicago, compliance paperwork from suppliers has been hit-and-miss. “Some vendors have not sent any requests to TBI at all, others have asked TBI to get employees as well as our agents to sign documentation,” says Geoffrey Shepstone, president of TBI.

Another indirect partner, who spoke on condition of anonymity, told PHONE+ carriers have become so stringent with CPNI requirements that theyre “adding more aggressive language in their agency contracts that give them greater authority to audit both the systems and facilities of their partners.” The agent says, “This creates a conflict as the individual agents themselves want to protect the privacy of their own customer data.”

To be fair, compliance with the CPNI rule changes is no easy change for the carriers. The task requires “considerable man hours,” says TelePacifics Bisnoff. “When rules come out that are just make this simple change, [government officials] have no idea the enormity of what it means.”

Economists at the Progress & Freedom Foundation agree. Last August, Thomas Lenard and Paul Rubin wrote a paper arguing against further regulation of customers proprietary data. One of the biggest reasons was the cost of implementing new requirements. Lenard and Rubin take issue with the FCCs statement that its “minor change” prohibiting certain data-sharing among companies wouldnt impact carriers very much because they already guard customer data.

The FCC “ignores differences between legal structures and business models of different companies,” write Lenard and Rubin. “There are costs to forcing all companies to follow the same business model that may not be immediately visible to a regulatory agency but that may be very real nonetheless to the actual parties involved.”

Looking for More? Find out more about key regulatory issues impacting agents and their suppliers when TelePacific Communications regulatory guru Nancy Lubamersky offers her expert analysis on Monday, March 10, at the Channel Partners Conference & Expo. Visit


Cavalier Telephone
Progress & Freedom Foundation

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About the Author(s)

Kelly Teal

Contributing Editor, Channel Futures

Kelly Teal has more than 20 years’ experience as a journalist, editor and analyst, with longtime expertise in the indirect channel. She worked on the Channel Partners magazine staff for 11 years. Kelly now is principal of Kreativ Energy LLC.

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